The Summer of Sharing
By Russ Roberts
(I’m Russ Roberts, the host of EconTalk, a sister site of EconLog here at the Library of Economics and Liberty. I’m going to blog here from time to time about what’s going on at EconTalk.)
It has been the summer of the sharing economy at EconTalk. (See here, here, and here.) The latest legal twist comes from the midwest. Milwaukee’s cab drivers are continuing to try to stop Uber and Lyft after a court case lifted the cap on the number of medallions in the city. They’re invoking the Takings Clause (HT: Cullin Spellings):
The Milwaukee Common Council responded in July of this year by voting unanimously to abolish the cap on licenses and simply require that drivers meet basic guidelines on insurance and other health and safety standards. The move, effective September 1, also opened the door for Uber, Lyft, and others to enter the market.
But the industry has kept swinging, filing suit in federal court on August 25 seeking to block implementation of the ordinance or, failing that, to secure financial damages. Among other claims, the cab companies contend that, by dismantling the barriers protecting them from competition, Milwaukee has violated the federal Constitution’s Takings Clause, which prohibits the government from seizing private property without just compensation. They argue that the value of their cab permits will be “destroyed” under the new system, so the city — or, more accurately, the taxpayer — owes them millions of dollars to make them whole.
The argument, while imaginative, ignores the inconvenient fact that the taxi permits were not a property right. Rather, the system was a gift from lawmakers at the expense of consumers — and one that violated the Wisconsin constitution, a court has found. The lawsuit is akin to “the last gasp of the gaslight industry trying to hold off electricity 100 years ago,” Milwaukee alderman Bob Bauman told the Milwaukee Journal Sentinel.
Mike Munger, in the episode that kicked off the sharing summer discusses the takings argument, here.
Coming Monday to EconTalk: Elizabeth Green talking about her book, Building a Better Teacher.